In 2014, the market for multiple sclerosis treatments could shift in favor of newer oral treatments. Let’s take a closer look at how Biogen, Novartis, Teva, Sanofi, and Receptos will fit into this changing market.

Several companies made notable advancements this year in treating multiple sclerosis (MS), a debilitating disease in which the body's immune system attacks the central nervous system.

MS affects an estimated 2.5 million people worldwide and 400,000 people in the United States. Of those patients, 85% are initially diagnosed with relapsing-remitting MS, which is characterized by alternating periods of relapses and remissions of the disease.

There is no cure for MS, and treatments have often caused terrible side effects, such as birth defects, cancer, and the risk of rare brain infections.

To better understand how much the market for MS treatments has evolved over the past year, let's take a closer look at Biogen Idec(NASDAQ:BIIB), Novartis(NYSE:NVS), Teva Pharmaceutical (NYSE:TEVA), Sanofi (NYSE:SNY), and newcomer Receptos (NASDAQ:RCPT).

Three promising plays: Biogen, Sanofi, and NovartisBiogen, Sanofi, and Novartis are the most promising plays in the MS treatment market. Let's take a look at their most notable treatments.

Company

MS treatment

Revenue (most recent quarter)

YOY growth

Biogen Idec

Tecfidera

$286 million

N/A (49% QOQ)

Biogen Idec

Tysabri

$403 million

0%

Biogen Idec

Avonex

$733 million

0%

Novartis

Gilenya

$518 million

64%

Sanofi

Aubagio

$59 million

N/A

Sanofi

Lemtrada

N/A (approved in the EU in Sept. 2013)

N/A

Source: Company quarterly reports.

While most MS treatments are injected or infused, Biogen's Tecfidera, Novartis' Gilenya, and Sanofi's Aubagio are oral drugs. This has led to some bullish forecasts for all three drugs -- analysts expect Tecfidera, Gilenya, and Aubagio to respectively hit annual peak sales of $3.8 billion, $2.1 billion, and $1.9 billion.

While all three drugs cause similar side effects, such as diarrhea and high liver blood tests, both Gilenya and Aubagio have worse serious risk profiles than Tecfidera.

That's not to say Gilenya and Aubagio don't have their advantages. Both are once-daily pills, while Tecfidera needs to be taken twice per day, with the dosage being doubled after the first week. However, Tecfidera's better safety profile has made it Wall Street's preferred drug.

Approved by the FDA in September 2010, Gilenya been on the market the longest. Looking into 2014, Novartis investors should check if Aubagio, which was approved in September 2012, and Tecfidera, which was approved last March, will threaten Gilenya's robust double-digit growth.

One play to avoid: Teva PharmaceuticalGains made by Biogen, Sanofi, and Novartis could sink Teva in 2014.

Last quarter, the injectable MS drug Copaxone generated $1.05 billion in revenue for Teva, accounting for 21% of the company's top line. However, sales of Copaxone are set to plunge next year, due to rising competition from the newer oral drugs and the expiration of a key patent in May 2014.

Mylan and Momenta Pharmaceuticals, which is partnered with Novartis subsidiary Sandoz, have already declared their intentions to launch generic Copaxone when Teva's patent expires.

A wild card: ReceptosInvestors should keep an eye on Receptos, a new company that went public in May.

Receptos' lead drug candidate, RPC1063, is a new oral drug for relapsed MS and could eventually become the fourth approved drug for the indication, alongside Gilenya, Aubagio, and Tecfidera. RPC1063 is in phase 2/3 trials, with interim data expected next year. The drug is also being evaluated as a possible treatment for inflammatory bowel disease.

Since Receptos is a pre-revenue biotech with no marketed products, gauging its true market value is tough. However, investors have been fairly bullish on Receptos' prospects -- the stock has rallied more than 100% from its IPO price of $14.

The Foolish takeawayIn closing, 2014 could be a very promising year for MS treatments. Here are three key things investors should keep an eye on:

Sales growth of Tecfidera compared to Aubagio and Gilenya.

The effect of generic Copaxone on Teva's top- and bottom-line growth.

Interim data from Receptos' RPC1063, which could suggest its superiority or inferiority to available oral treatments.

These developments could significantly alter the market for MS treatments and exacerbate the decline of older injected and infused treatments in 2014.

Author

Leo is a Tech and Consumer Goods Specialist who has covered the crossroads of Wall Street and Silicon Valley since 2012. His wheelhouse includes cloud, IoT, analytics, telecom, and gaming related businesses. Follow him on Twitter for more updates!